Tax time can be confusing and stressful for a small business owner. Between finding all the necessary records and receipts and trying to understand how taxes are figured, it is easy to overlook deductions you have coming. It helps to have a checklist of the items that are deductible, so you can make sure you haven't missed anything.

Cost of Goods

You can deduct your inventory expenses, including products and labor you paid to inventory personnel. This deduction goes under "cost of goods sold" on the Internal Revenue Service Schedule C, Part 3.

Wages, Commissions and Fees

Any money you pay to employees is deductible. So are commissions to salespeople and fees to anyone you pay in conjunction with operating your business. This includes any contract labor you used during the year. You can deduct the cost of any benefits you provide for employees, as well, including not only health insurance, but pension and profit-sharing plans.

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Office and Facilities Expenses

You can deduct your utilities for business property. You can also deduct rent, interest payments on a mortgage and broker fees. You may deduct all costs of office supplies, tools and any other items necessary to doing business. For large equipment, you must depreciate it, deducting part of the cost of the equipment each year for the life of the asset.

Taxes

Any business taxes you pay are deductible. This also includes licensing fees. The Internal Revenue Service considers taxes part of the cost of doing business, and it comes off your taxable income. If you have company vehicles, license plates are deductible.

Client Expenses

You may deduct expenses for entertaining clients. This includes 50 percent on meals, plus travel, tickets and any other expenses you incur when seeing clients. You can also deduct expenses for going to see potential clients, even if the effort is not successful.

Vehicle Expenses

You company vehicle expenses are fully deductible, unless you use the vehicle for personal use as well. In that case, you have to estimate how much of the usage is for business and deduct only that portion. You can either deduct actual vehicle expenses or use the IRS mileage allowance, which is published every year near tax time.

Repairs, Maintenance and Improvements

You can deduct any work you have done to repair business facilities, equipment and company vehicles. You can also deduct improvements and expansion projects. Do not confuse payments to contractors with improvement costs. If you claimed contractor payments as a wage deduction, do not also claim them for making improvements.

References

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About the Author

Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.